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06 Jan 2014

Biggest Mistakes SEOs Make When Analyzing PPC Data

January 06, 2014PPC Advertising

Biggest Mistakes SEOs Make When Analyzing PPC Data

When Google’s ‘Keyword (Not Provided)’ update wiped out the vast majority of organic, keyword level data, many SEOs turned to Google Adwords as a key source for keyword research. While the metrics across SEO and PPC are largely the same, the proper interpretation of those same metrics across the two channels can vary greatly. Here are some common misconceptions to watch out for.

A higher CTR does not mean a better keyword

Not only does click through rate alone not determine whether a keyword is high or low quality, PPC keyword bid optimization intentionally reduces certain keyword’s CTR.

Yes, you read that right.

In the organic/SEO world where clicks are free, there is no penalty for capturing traffic that does not convert on your site (there is a tremendous opportunity cost, but that is another discussion). We always want a higher CTR which we largely obtain through improving keyword rank. Just like in PPC, the #1 factor for improving CTR is rank; the higher the rank, the higher the CTR and vice versa.

Unlike organic traffic, for PPC every click comes with a cost. If the cost for showing an ad in position 1 is too high, (which it often times is) the best decision may be to reduce your keyword’s bid, consequently reducing its ad position, and CTR.

Reducing a PPC keyword from position 1 to 3 and subsequently decreasing click-through-rate by 50% does not make a keyword any better or worse for SEO purposes than it was before. It may simply mean that PPC competition is extremely high and it is not cost effective to pay for the top ad position. If this is the case, we have intentionally decreased our keyword’s CTR by decreasing ad position so that it can be profitable and drive cost-effective traffic. The keyword’s value has not changed, just the cost associated with the traffic.

For both SEO and PPC, the ultimate goal is to maximize profit. For SEO that means maximizing traffic on valuable keywords, while for PPC that means finding and optimizing keywords to provide you with the right balance of click costs, traffic volume, and revenue.

PPC impressions, clicks, and CTR are not Key-Performance-Indicators (KPIs)

kpiTaking any data point and analyzing it without considering other data is generally a poor decision .This holds true for common traffic related metrics as well. As we just discussed, when analyzing Adwords data for activities like keyword research, CTR is a poor metric because it doesn’t paint a good picture of keyword quality and it is highly influenced by other factors like ad position.

Clicks and impressions are not a good KPI simply because they are not reflective of a keyword’s performance. By definition, a KPI is a Key-Performance-Indicator and clicks and impressions are data points that help advertisers understand what happened in Google [A user searches and sees an ad (impression) and then clicks on it (clicks)] but not what happens once that user lands on your site.

Using only Adwords traffic data is not recommended because it is possible to pay for whatever traffic you’d like, whether it is providing value or not. For an extreme example, in Adwords, Vertical Measures could pay for traffic on a generic search like [dogs]. According to the Google Keyword Planner, we can expect 550,000 monthly searches at an approximate CPC of $2.07.

Let’s say our ad is in position 1 and has a CTR of 10%, meaning we would generate 55,000 monthly clicks for $113,850. If, in our SEO keyword research, we only considered clicks and impressions, [dogs] may be our top priority SEO keyword. What we’ve failed to notice is that exactly zero of those 55,000 visitors turned into customers (and we just wasted $113,850 in ad spend).

Obviously this is an extreme example but it does help illustrates why neither click or impression volume should be used as a standalone metric for determining SEO keywords to target.

PPC keywords are not search queries

Possibly the simplest, yet most common mistake when analyzing PPC data for SEO keyword research is misunderstanding the distinction between keywords and search queries. In Adwords, advertisers bid on keywords which trigger ads on relevant user search queries. Depending on your keyword’s match type, the keyword and search query can vary drastically.

The broad match keyword ‘dogs’ may never generate a single click for a user searching for the exact match term [dogs]. In fact, because Google’s algorithm matches broad match terms to synonyms, the search query may not even contain the word ‘dogs.’ It’s possible that your ad is matched to search queries for puppies, canines, or labrador retrievers.

Unlike organic data search query data that is now being masked by ‘keyword (not provided),’ this data is all readily available in Adwords. To find it in Adwords, simply navigate to ‘Keywords > Details > Search Terms, All’ and you can see exactly what users were searching for when they clicked on your ad.

Search Terms in Adwords

Recap

Adwords is an outstanding source of data for SEO keyword research. There are many different ways to use PPC data to improve your SEO results, but it’s just as important to avoid these common mistakes. Keyword research is one of the very first steps in any long-term SEO plan and a slight miscalculation early on can lead to months of wasted effort.